Home > Personal Finance > Less is More in Rental Properties

There are several schools of thoughts when it comes to wealth building. As always, I have my very own too. I am sharing this article with you as an investor who currently owns several rental properties as well as sharing my lesson with you through my experiences with my landlord clients.

Rental properties are just one of the many ways of increasing wealth. Most of the time, rental properties appreciate and what better way to have someone pay your mortgage for you and at the end of the mortgage term, it becomes yours. All you really come up with is the initial down payment and a little cost of getting started.

Now, the above is describe if we lived in a perfect world where the properties appreciate over time, tenants rush to pay their rents by the 1st and they leave the properties (when they move out) in the same condition you have turned the house over initially. [Insert laughter here]. But we know that we don't live in a fairy tale land far far away. Reality is much closer, nearer and sometimes just down right a big hassle.

Today, my beliefs about how to build wealth changed. Thanks to the screaming Dave Ramsey on the radio one day, I become a fan and slowly but surely understood what it means to be financially free and handling finances God's way. I believe in owning real estate free and clear. No debts and no loans. Yes, it will take a long time before I could save up enough for each rental, but with my experiences, I do think that "less is more".

Mathematically speaking, should each property cash flow about $200, I would have to own 10 houses to gain a $2,000 of income. However, if I own 2 properties free and clear, each at $1,000, I would still get my $2,000. Emotionally, handling 2 tenants and 2 properties are alot easier than listening to 10 tenants about why rent can be on time that month. As if Christmas in December is a big surprise and school kids go back to school in August and they need new clothes, shoes and other school supplies are something that just hit their budget suddenly. Unfortunately, banks do not care about reasons such as these. So, they withdraw money from our bank accounts every month automatically and without fail.

I believe in rentals and I believe in real estate. I believe that a well-diversified wealth building strategy should include real estate as well as mutual fund investments. What I don't believe in anymore is to nimble and bite bits and pieces here and there. 5% down all over the place. Nope. I want to do 100% down in my rental properties - or pretty darn close to it.

Yes, you are entitled to your ideas too. They may be right for you. But not in my case. Where life always happens and gets busy, I do think that less is more at this point in my family lifestyle right now.

If you are looking to diversify your wealth building strategy and would want to work with a sound economic realtor who has the real experience of landlording, please feel free to contact me. I promise that I will bring value to the table and educate you along the way, no matter where your experience level is in rental properties. I solely work with landlords in the Frisco, Plano, North Dallas, Little Elm, Celina, Prosper, McKinney, Allen areas. However, at this time, due to my schedule, I no longer do tenant representation except given a very unique circumstance. Rental properties are a different ballgame altogether. Work with a realtor who will help you evaluate your steps.

Much to your success...

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